A Complete Guide to Starting a Food Truck Business

This industry is poised to grow to $2.17 billion in the US by 2017 – a nearly four-fold increase from $650 million in 2012.

For many entrepreneurs, a food truck business represents a great way to make money while doing something they love — creating fresh flavors and bringing them to a hungry audience.

In order to start a modern food truck business, you will need a few more things than the truck itself — a website to inform visitors about your location and daily menu, and a convenient way to collect payments.

In this post, we’ll show you everything you need to start a food truck business.

How to Start Your Food Truck Business with Ecwid

As an entrepreneur, starting a food truck business is an exciting idea indeed. But you can’t just buy a truck, find a parking spot and start dishing out the delicious fare. There are a number of legal issues you have to take care of – licenses, permits, insurance, etc. — before you can hit the road.

We’ve broken this guide into four sections:

Deciding on a concept for your food truck

Getting permits, licenses and meeting regulatory requirements

Buying and equipping the food truck, hiring employees, etc.

Operating and promoting your food truck

Let’s look at each of these in detail.

Deciding on a Food Truck Concept

Food trucks are very different from full-fledged restaurants. You are limited by space, equipment and customer expectations. Most food entrepreneurs find that this business is all about striking a balance between what you can provide vs. what you want to provide.

There are three things you must consider before you start:

Space: Space constraints mean that you can’t fit all the equipment you want inside the truck. It also means that you can serve a limited number of customers each day.

Time: Most cities allow trucks to operate only 2-4 hours in a day, usually around lunch time. If the food you want to serve takes too much time to cook, you’ll struggle to make a profit.

Customer demands: Since food trucks usually serve lunch, customers prefer dishes that are relatively light and affordable. Given that there is no dining area or proper cutlery, they also prefer foods that are easier to eat.

The food truck business attracts a lot of adventurous people — both as chefs/business owners and customers. As such, there is a trend to offer more adventurous dining options. Think fusion foods, ethnic cuisine, and fresh takes on old classics.

Start by identifying a clear, underserved niche. Then evaluate your cooking skills and passions. What kind of cuisines excite you? What foods do you enjoy cooking (and serving)? Can you find a way to make these foods different and easier to eat?

Do a survey of popular food trucks in your city. Evaluate what dishes they are selling, what price they are selling for, and what kind of equipment they are using.

Doing this homework will make a long way towards making your food truck a success.

Getting Permits and Licenses

Most cities treat food trucks like conventional restaurants. This means that they have to fulfill several regulatory requirements, comply with health and fire safety codes, and have all the necessary permits and licenses.

For many food truck owners, this is the hardest, and the most time-consuming part of the business.

Let’s look at everything you’ll need to start your food truck:

1. Figure Out Local Requirements

The first step in starting a food truck is to understand (and meet) local city requirements.

While most cities have well-defined guidelines for brick and mortar restaurants, food trucks usually operate in a gray zone. Smaller cities sometimes don’t even have any fixed guidelines for their operation.

Start by searching your city’s local requirements. Use a query like this:

You might also have to meet some state requirements. Your city’s website should tell you what these requirements are and how to meet them.

Lastly, search and see if your city has a local association of food truck owners. Most large cities have at least one such association. Here’s one in NYC, for example.

These local associations can be a massive source of help in understanding and meeting local requirements. These requirements can be very detailed for some cities; not meeting them can jeopardize your license/permit.

Your local food truck association can help you meet these often complex requirements.

2. Incorporate Your Business

Most cities require some form of proof of business before they’ll give you a permit. This proof can be in the form of:

A business certificate (for a food truck owned by an individual)

A partnership certificate (for a partnership involving two or more persons)

Proof of incorporation (as an LLC or corporation)

Although you can start off without incorporating (i.e. run the business as a sole proprietorship), we highly recommend starting an LLC. It limits your liabilities and makes accounting, taxation, etc. easier. In a venture like food trucks, this is a must.

You might also need to file a Doing Business As (DBA form in some states. This form identifies what name your food truck operates as, and if it is different from your legal entity (individual or corporation).

3. Get Basic Licenses and Permits

Almost every city has two basic legal requirements for food trucks:

A license that legally authorizes a person to operate a food truck

A permit that gives a food truck license owner permission to run the food truck

You need to get a license before you can get a permit. There is no waiting list to get a license, though there are several requirements you must fulfill before applying.

In NYC, for instance, you need the following before applying for a license:

5. Buy Insurance

Broadly speaking, you need insurance for three things when starting a food truck:

Your employees: Most cities require food truck owners to buy appropriate insurance before they can apply for a permit. NYC, for instance, requires food truck owners to buy workers compensation and disability insurance.

Getting this insurance is critical since a food truck is a dangerous work environment a with significant risk of injury or accidents. Insurance will severely limit your liabilities in case of an accident.

Your business: What happens if a customer slips and gets injured when buying something from you? Or what if a competitor sues you for infringing a trademark?

To protect yourself in such situations, you’ll need business insurance in the form of general commercial liability insurance.

Additionally, you can also purchase property insurance to cover equipment inside your truck such as kitchen appliances or computers.

This is optional — you likely won’t need this insurance to get a food truck permit — but it is highly recommended.

As a motor vehicle, you are required by law to purchase insurance. Larger trucks might fall under the commercial vehicle category and thus, require commercial vehicle insurance.

Keep in mind that most auto insurance policies don’t cover any equipment inside the truck, just the truck itself. You’ll want to purchase property insurance if you want to cover the equipment.

We recommend talking to an insurance agent to figure out your requirements and get a custom policy.

Buying the Truck, Hiring Employees and Getting Health Permits

Once you’ve got the basic permits, you can go ahead and buy your truck.

We recommend doing this after you get permits because there is often a waiting period for permits.

You don’t want to sink money into a truck while you wait for a permit to get approved.

Let’s look at these steps in further detail.

1. Buy a Food Truck

This is the part food entrepreneurs enjoy a lot — finding, equipping and designing the food truck. A new food truck with most necessary equipment will cost upwards of $75,000. A used truck can be purchased for $20,000 to $40,000. Check out websites like UsedVending.com and eBay to find used trucks.

How you equip the truck will, of course, depend on your requirements. It’s a good idea to have a detailed list of all the equipment you will need based on what kind of food you want to make.

Running the Business

Once you’ve bought a truck and acquired all the right permits, you can focus on the operational aspects of your business.

For your food truck to thrive, you need to have a way to collect payments and a way to notify people where you are parked for the day and your day’s menu.

Let’s look at how you can do this below.

1. Setup a Website

Your website is the digital home of your truck. This is where you’ll direct social media followers and customers to learn more about your food truck and what kind of food you sell.

A website is more important for a food truck than for a regular restaurant since the menu changes on a daily basis. You’ll want a central hub where customers can find your latest menu and see your location for the day.

This website doesn’t need to be complex. A simple page listing your menu, location and a bit of background information will do fine.

An easy (and free) way to create this website is through Ecwid’s Starter Site.

These are simple websites where you can share your location, your list of products, and add custom content such as menus. The site plugs in with Ecwid’s shopping cart so you can even use it as a digital POS.

3. Find a Way to Accept Payments

You will obviously need a way to accept payments. Unfortunately, a conventional POS with a merchant account can be both ridiculously expensive and time-consuming to procure.

A cheaper (and faster) alternative is to get a digital POS (Point of Sale) like Ecwid.

Ecwid connects with Square, Clover and Paypal to offer you a way to collect payments offline. Usually, this involves connecting a card reader (such as Square) and integrating with Ecwid. Once integrated, you can order products through Ecwid and accept payments via the card reader.

This essentially gives an online store an offline presence. You can learn more about Ecwid’s POS here. You can also read more about Square.

4. Find a Spot and Start Cooking

Finally, you can start cooking and selling your delicious food.

But before you can do that, you need to find an approved parking spot.

Every city has restricted zones where food trucks cannot ply. You’ll have to ask your city for approved streets. Most cities allow food trucks to operate for 2-4 hours at a stretch.

Once you find a spot on one of these streets, make sure to park as close to the curb as possible. Ideally, your spot should have enough space for people to grab a seat nearby.

Experiment with different locations and timings. You’ll find that the old location, location, location! maxim applies to food trucks as well.

Conclusion

Starting a food truck business seems like a daunting task. There are tons of permits to procure, hundreds of requirements to meet and thousands of dollars to invest.

Try breaking down the entire process into smaller steps. Tackle each step one at a time and make sure that you get your basics right. Building the food truck might be the most fun part of the business, but you also need to ensure that you have the permits and licenses necessary for operation.

Happy cooking!

About the author

Jesse is the Marketing Manager at Ecwid and has been in e-commerce and internet marketing since 2006. He has experience with PPC, SEO, conversion optimization and loves to work with entrepreneurs to make their dreams a reality.